The Partnership for Carbon Accounting Financials (PCAF) has launched a coalition with a number of leading UK businesses to promote measurement and disclosure of carbon emissions in the financial sector.
The industry-led partnership, whose aim it is to standardise carbon accounting for the financial sector, has joined forces with the international business of Federated Hermes, Triodos Bank UK, NatWest Group, Lloyds Banking Group, CDC Group, Investec, Ecology Building Society and Nationwide Building Society for a new UK coalition.
The new partnership, initiated and chaired by the international business of Federated Hermes and following a collaborative structure first created in the Netherlands, will see participants enhance their cooperation on carbon accounting.
It will aim to apply PCAF’s methodologies for measuring financed emissions in a UK context, share best practices, work on data quality improvements and perform research on further method development.
Giel Linthorst, executive director of PCAF secretariat and director at Guidehouse, said: “The UK has always been a leader in the financial industry. I’m very pleased to see that this PCAF UK coalition is similarly taking a leading role as well.
“Stronger and national collaboration is crucial within PCAF to enable PCAF participants to improve their data quality and steer their portfolio in line with the Paris Agreement.”
Mark Carney, the Prime Minister’s finance adviser for COP26, added: “To achieve net zero we need a whole economy transition – every company, every bank, every insurer and investor will have to adjust their business models, develop credible plans for the transition and implement them.
“For financial firms, that means reviewing more than the emissions generated by their own business activity. They must measure and report the emissions generated by the companies they invest in and lend to.
“PCAF’s work to standardise the approach to measuring financed emissions is an important step to ensuring that every financial decision takes climate change into account.”
The initiative is open-access and free-of-charger, allowing banks and investors across the globe to assess the GHG emissions of their portfolios in an effort to align their business strategies with the Paris Climate Agreement.
Today, the initiative counts 77 financial institutions with over £13trn in AUM and is rapidly expanding across North America, Latin America, Europe, Africa and the Asia Pacific region.
Eoin Murray (pictured), head of investment at the international business of Federated Hermes, noted: “Enacting genuine change to the level of carbon emissions that we finance as an industry requires transparent and rigorous carbon accounting, the efficacy of which is only enhanced when public and private stakeholders are able to do so collaboratively.
“PCAF UK allows us to work as a collective towards a common goal, and we are delighted to be leading the UK coalition.”